FHLC ETF Explained: Returns, Expense Ratio, Holdings and Alternative ETFs
A passive Fidelity ETF tracking the MSCI Health Care index. It spreads exposure across pharmaceuticals, biotech and medical devices, at a low expense ratio.
SubscribeWhat Is This ETF?
This is a passive ETF that tracks the MSCI USA IMI Health Care 25/50 Index. It broadly holds US-listed health care companies, from large caps to small caps, providing diversification across the whole sector.
It suits investors who want low-cost, long-term diversified exposure to the US health care sector.
Fidelity launched the ETF in 2013, and it is managed passively (index tracking).
How Does It Invest?
| Item | Details |
|---|---|
| Tracked Index | MSCI Health Care 25/50 Index |
| Management Style | Passive (index tracking) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.08% |
The fund holds the constituents of the MSCI Health Care 25/50 Index on a market-cap-weighted basis. It holds more than 300 stocks, from large pharmaceutical companies to small and mid-sized biotechs, so exposure to health care is spread evenly without a bias toward any single sub-industry. The 25/50 buffer rule is designed to ease concentration in any single stock.
- One of the lower expense ratios among comparable health care ETFs
- Broad diversification across more than 300 holdings, including small caps
Size and Costs
Assets under management (AUM) stand at $3.9B, and the expense ratio is 0.08% per year.
While XLV focuses on large caps within the S&P 500, FHLC tracks a wider universe that includes small caps, so the two differ in the number of holdings. In terms of liquidity, XLV has the advantage.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe health care sector is defensive in nature and has tended to show relative stability when markets decline. However, because the fund includes biotech exposure, short-term volatility can arise from US Food and Drug Administration approval issues and drug pricing policy developments.
When economic uncertainty rises, money tends to flow into health care ETFs as a defensive sector. An aging population and growing demand for medical innovation serve as long-term supply and demand tailwinds, while short-term outflows can occur when drug price regulation comes into focus.
Pros and Cons
Its strengths are a low expense ratio and broad diversification, while large-cap concentration and regulatory risk are the main considerations.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
Among the products shown in the table, XLV is a direct comparison centered on S&P 500 health care large caps, and VHT tracks an equally broad health care universe, making it structurally similar to FHLC. IYH is a health care ETF managed by iShares and serves as a useful reference. Meanwhile, investors who want to focus only on biotech can consider IBB or XBI, and those who want leveraged health care exposure can look at CURE.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLV | State Street Health Care Select Sector SPDR ETF | $184.02 | -0.3% | $49.1B | 0.08% | 1.39% | +27.4% |
 VHT | Vanguard Health Care ETF | $340.80 | -0.1% | $20.7B | 0.09% | 1.35% | +26.2% |
 XBI | State Street SPDR S&P Biotech ETF | $154.97 | +1.9% | $10.5B | 0.35% | 0.35% | +41.1% |
 IYH | iShares U.S. Healthcare ETF | $77.30 | -0.4% | $4.8B | 0.37% | 1.03% | +27.0% |
 IHI | iShares U.S. Medical Devices ETF | $56.43 | -0.1% | $3.9B | 0.37% | 0.46% | -7.1% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| LLY | Lilly(Eli) & Co | 0.25% | $1409.38 | -0.1% | $1.33T | 46.3 | 0.48% |
| JNJ | Johnson & Johnson | 0.18% | $266.17 | -1.6% | $640.8B | 40.4 | 2.01% |
| ABBV | Abbvie Inc | 0.12% | $286.00 | -1.0% | $505.4B | 49.2 | 2.4% |
| UNH | Unitedhealth Group Inc | 0.11% | $404.44 | +1.0% | $363.0B | 23.1 | 2.23% |
| MRK | Merck & Co Inc | 0.09% | $144.67 | -2.5% | $356.9B | 147.7 | 2.35% |
Investor Checkpoints
Here are the key points to review before investing in FHLC. It is important to fully understand the fund's health care sector concentration, the drug pricing regulatory environment and its cost structure before deciding whether to invest.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Check the cumulative cost impact over a long holding period | Remains low |
| 📋 Drug Pricing Regulation | Developments in US drug pricing policy and health care legislation | Needs review |
| 🔬 Sub-Industry Weights | Check the weights of pharmaceuticals, biotech, medical devices and health care services | Changes quarterly |
| 💱 Exchange Rate | Impact of the dollar exchange rate on returns converted to won | No currency hedge applied |
Tighter drug pricing regulation and biotech approval issues are the main causes of short-term volatility. Health care is classified as a defensive sector, but it tends to react relatively sensitively to policy risk.
It is a suitable choice for health care sector investors who want a low expense ratio and broad diversification. If liquidity is the priority, XLV is the pick, while FHLC or VHT are the comparison candidates for those weighing both cost efficiency and breadth of diversification.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of November 3, 2026.
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